Mobile payment at present

 Getting in contact with contact-less card

I recently read the 2020 Debt Issuer Study that was commissioned by Discover Financial Services PULSE debit network and conducted by management consulting company, Oliver Wyman. The study reviewed 55 financial institutions that covered 42% of the nation's debit market and issue approximately 157 million cards. The study indicated that cardless transactions are pretty much part of the norm now when it comes to payment activities. No big surprise there.

The study also indicated that card-not-present payments spiked 21% in 2019, compared to 2018, and account-to-account transfers with debit cards doubled between 2018 and 2019, enjoying 40% of all debit growth. Also, not a surprise, at least not in my life.

Having a millennial as a son who sometimes lets his account balance hover around $0.58 until he gets paid, I can see how account-to-account transfers could be increasing (and I was probably was responsible for much of that number).

In regards to card-not-present payments, the study indicated that segment grew 10 times more than payments with cards did in 2019. The reason? Consumers began shopping online and paying with apps such as PayPal, Venmo and Zelle. Suddenly, going out to dinner and splitting the bill wasn't an issue any longer since you could simply "Venmo" over your part of the payment. Having used this method of payment I can assure you, it takes away the fear when the waiter brings the check.

Businesses also started using these apps and everything was going along pretty well and then… the pandemic hit.

And everything that had to do with digital payments and contactless payments which had been showing a nice and steady trajectory upwards, blew the numbers off the charts as online was not just a convenient way to shop, it was the only way a lot of people were comfortable shopping. Safety was paramount so people took to their phones and computers.

Suddenly everyone seemed to be shopping online, whether it was for food, groceries or office materials to work from home. It was apparent in the television advertisements that pushed "order online and pickup at curbside" or offers to bring goods straight to your card and "never have contact."

Before the pandemic hit, debit card use was growing in digital-commerce channels with over 77.4 billion debit transactions made in the U.S. in 2019, up 6.5% year-over-year.

But now, card payments still represent 73% of all debit transactions, according to the report, but they only showed a 2% increase in 2019, because the growth won't be in the actual card payments, but in the contactless and card-not-present transactions. The study indicated that by 2021, which isn't that far off, 87% of debit cards will be contactless.

According to Tom Hayes, a partner at Oliver Wyman and one of the study's principals, card-not-present transactions already represent 27% of all debit transactions and are growing 10 times faster than card-present transactions. But the true growth will be in what Hayes refers to as the "traditional card-present merchant categories", such as grocery and restaurants, which is expected to gain in card-not-present remote ordering.

Before the pandemic, at the close of 2019, almost 30% of the respondents were issuing contactless debit cards to some of their cardholders. But by the end of this year, the number could more than double.

The world of payments is changing. Remember to keep us posted on how it affects you and your business.

Covid-19: the digital acceleration it caused that no one saw coming

To suggest that COVID-19 has transformed the future of business would be too obvious. But, in certain industries like retail, it is hard to fathom just how much change the pandemic has ignited.

The crisis has expedited society further into the digital world; technology that was predicted to be adopted in five years is now on track to be embraced in mere months or even weeks.

Shoppers have been forced to go from wandering aisles to navigating websites and using QR codes. We are seeing new user groups embracing e-commerce and digital payment methods at a much faster rate than anyone ever thought possible.

It's important to note that these new consumer habits are taking root and will become preferences that persist long after the pandemic. The digital world Is no longer for the millennials: every age group Is represented these days.

There's unprecedented urgency for merchants to be proactive as the usage of digital payments spikes. Offering preferred payment methods that are not only convenient, but safe or contactless unlocks a whole new world of opportunities, literally. The retailers seeing exponential growth are the ones who have tailored and localized their payments offering to a global audience.

Covid-19 best time for Mobile payments

With COVID-19 currently causing the average consumer to balk at physical payments options such as cash and cards, the time is now for mobile payments to truly take the world by storm.

While mobile payments has already become ubiquitous in certain countries such as China, it has always struggled a bit in the U.S. This is due to a variety of reasons, including:

• Older population struggle to learn how to use it.
• Many people view it as a novelty.
• It doesn't seem more convenient than other payments method.
• Users don't see a reason to switch from their other payment methods.

However, the coronavirus has changed much of how people look at their payments' options. For example, in the U.S., there is an overall coin shortage because customers are balking at cash. Many are using cards instead, but there is still the issue of having an employee touch the card or having to press buttons or a touchscreen on a point-of-sale device.

For mobile payments vendors, COVID-19 is an ideal opportunity to push mass rollout of mobile payments. There are few moments like now where consumers are collectively open to the idea of new payments methods…especially contactless ones. And for retailers looking to get customers to switch to safer and more available payment methods, mobile payments can be just the ticket.

In order for mobile payments vendors, retailers and other businesses to truly take advantage of this moment, they need to revamp their messaging strategies.

For example, vendors should launch informational campaigns to give users simplified tutorials on how to use mobile payments platforms. It could be as simple as copy on a digital billboard that gives three steps to using mobile payments or a TV advertisement that describes contactless as a good measure to stay safe from COVID-19.

Other communication tactics include:

• Showing how much safer contactless is to traditional payment methods.
• Offering rewards to users for recommending new users.
• Communicating its advantages to retailers.
• Retailers can offer discounts for mobile payments users to drive up acceptance.

Now is the time for mass adoption of mobile payments…if vendors and retailers take advantage of this moment.

Creativity and innovation will be the post pandemic keys to customer retention

change once the world got back to business following the coronavirus pandemic. Although a large part of the workforce across the country still continues to work from home, stores and restaurants have opened again, but with limits to the number of customers they can have. Creative restaurant owners set up tables or tents outside to accommodate guests and meet the new rules and regulations regarding social distancing and mask wearing.

It will be the business owners who develop creative strategies like the restauranteurs and consider collaborations with other companies in order to answer the customers' need for safe and contactless payments.